Defying The Deficit: We Have A Plan
SCOTT SIMON, host:
This is WEEKEND EDITION from NPR News. I'm Scott Simon.
This week, the co-chairs of President Barack Obama's deficit commission released a blueprint of their plan to reduce the nation's soaring deficit. The proposal is aggressive and controversial. It calls for steep cuts in defense spending, increased taxes, and changes to Social Security.
Bruce Reed is the executive director of the president's National Commission on Fiscal Responsibility and Reform. He joins us from his office.
Thanks for being with us.
Mr. BRUCE REED (National Commission on Fiscal Responsibility and Reform): Thanks for having me.
SIMON: Well, let's ask about some of the most controversial proposals, as theyve been reported this week. One, of course, Social Security reform. The proposal suggests raising the retirement age to 68 in the year 2050. Now, of course, that's 40 years from now. Is this just kicking the can down the road to another generation?
Mr. REED: We need to make some changes now if Social Security is going to be strong in the future. We tried to put forward a balanced approach that does more to protect the very poor and the very old. And since we're all living longer, we want to ask those who can work a little longer to do so, while protecting those who can't.
SIMON: What about the proposal also calling for increasing taxes, I gather on most Americans?
Mr. REED: We put forward a comprehensive tax reform plan that actually lowers tax rates, broadens the base, closes a bunch of tax loopholes, and will reduce the deficits at the same time. So it'll be good for the economy, it'll give Americans a much simpler tax code, it'll relieve a lot of that burden. It's fair, it's progressive, and we think it's a very interesting proposal.
SIMON: Well, maybe I should have been more specific. Items like reducing the tax interest in mortgage payments, for example.
Mr. REED: Right. Well, there are a lot of tax expenditures which we view as spending in the tax code and we need to have a national debate about them. It's $1 trillion a year that goes into all these different tax breaks. Some of them we might decide to keep, but what we decided to put on the table was get rid of them all at once, see how low that could get the tax rates, and then if folks want to add others back, they can do that, but theyll see that every one of these tax breaks is costing all of us more money. It's costing us all higher tax rates as a result.
SIMON: And I'm sure you can appreciate part of the public alarm expressed by some people at the - even suggesting that the mortgage deduction allowance might be abolished is - for a lot of Americans the amount of money they have invested in their home is a kind of pension plan.
Mr. REED: Well, remember, most Americans don't itemize their taxes; they just use the standard deduction so they're not benefiting from that deduction, to begin with. It's entirely possible that Congress and the administration would decide to phase any changes in over a long period of time, which is just fine. The one comforting part of dealing with a long-term debt burden is you don't have to solve it all at once.
SIMON: And a question that's also been asked this week - how do you, as these proposals suggest, cut the defense budget by $100 billion when there are two ongoing wars right now, thousands of veterans coming home, many of them with serious injuries, and a terrorist threat that we get reminded about every few weeks?
Mr. REED: The changes that we proposed in the defense budget are in the standard operating budget of the Defense Department, not the overseas operations. That will depend in part on what happens to the missions overseas, which is not something we can predict over the long haul. But look, the Defense Department is carrying some significant burdens that we need to deal with. They have - 10 percent of the defense budget goes into health care.
Mr. REED: They have considerable pension obligations and other difficult budget burdens that they're carrying that are making it harder for them to maintain the nation's defenses. So it's important that if we're going to make tough choices, that nobody be spared.
SIMON: Bruce Reed, executive director of President Obama's Fiscal Commission and CEO of the Democratic Leadership Council.
Mr. Reed, thanks so much.
Mr. REED: Thanks so much for having me.